Explainer: What to expect from the National Commission of Audit

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Chris Sadleir does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

By Thursday evening the rabbit will be out of the hat. The highly anticipated report of the National Commission of Audit will have been released.

The Audit was set in motion soon after the Abbott government was formed and officially announced in October last year.

Its task is to advise the government on where it can get greater efficiency and responsiveness from the public budget. Among its terms of reference is a request to identify areas of unnecessary duplication, keeping in mind that “government should do for people what they cannot do, or cannot do efficiently, for themselves, but no more”.

The Commission is led by Tony Shepherd, President of the Business Council of Australia and Chairman of Transfield Services. The other Commissioners are highly experienced in the workings of government: the former senator and minister in the Howard government Amanda Vanstone, two previous heads of government departments, Peter Boxall and Tony Cole, and a former head of a series of government departments from Western Australia, Robert Fisher.

Its secretariat is headed by Peter Crone of the Business Council of Australia and supported by public servants from the Department of Finance and Department of Treasury.

Expect a shock

The last Commission of Audit reviewing the workings of the national government was in 1996. However, as the University of Queensland’s Professor John Quiggan noted shortly after the Commission was announced, conservative governments at state and national levels in Australia have made use of these kinds of exercises since the 1980s often for shock value, if not direct advice.

Part of the shock is that such commissions reveal previously hidden preferences based on ideology for the tasks of government and governance. Such preferences may be at odds with policies taken to the polls.

The report has had a reasonably long development. The first phase, which was to be completed in January focused on the scope of government, the efficiency and effectiveness of government expenditure, the state of the government’s finances, and the adequacy of existing budget controls. The second phase focused on the infrastructure needs for national government and how to approach public sector performance and accountability.

In announcing the finalisation of the report recently Treasurer Joe Hockey said the aim of the Commission was to examine “the scope for efficiency and productivity improvements across all areas of Commonwealth expenditure” and recommend how to achieve budget savings “sufficient to deliver a surplus of 1% of GDP prior to 2024”. To achieve this the Treasurer says there will “86 recommendations for improving the efficiency of the government sector in Australia and for restoring budget integrity”.

Judging by the selective leaking of likely points in the coming budget the Commission report will highlight the parlous state of the government’s financial position.

Possible ways of repairing the situation may well include a co-payment for visiting the doctor; responding to a healthier but aging population by increasing the pension age; greater competition between providers in the higher education sector and further shifting of costs of degrees to students; greater use of public private partnerships as a means of providing infrastructure; support for new regimes for measuring the performance of government services and operations, and just possibly further pressure to move more public servants from Canberra to regions.

How important is it that the government act on the recommendations?

Joe Hockey has said the Commission should be seen as independent of government, and while it offers an important perspective on how the budget should be framed, it is only one perspective, and the government would “not automatically accept all its recommendations”. Nor are the Commission’s findings a “quick fix”, but a “useful framework for the development of policies that will benefit Australians over the longer term”.

This creates a good deal of wiggle space for the government to both gauge and calibrate its own message around the release of the report.

The Commission’s report is an opportunity for key constituencies to place on the political agenda ideas and initiatives consistent with specific ideologies and fashions.

The task becomes one for the government to gauge how deeply some of these views are held and the likelihood of success with voters. The task then becomes selling a particular story – at the moment crisis and the need for decisive action.

Some of this is theatre.

But some may well be central to the how this government sees the task of governing. As a government there is an expectation of a further term in office, with the ideas from the Commission of Audit providing a compendium to draw on. There is no need for the Treasurer to buy into all the ideas just at the moment, some will be traded off, some dismissed or negotiated away, and some will shape policies into the future.

Experience at the Commonwealth level with the last CoA in 1996 was mixed. Yes, there were important statements about parlous finances and the need for a more conservative future. However, the actual recommendations were brushed aside quickly and only very selectively drawn on over the lifetime of the Howard-Costello government.

For those living in Canberra there was a sense of foreboding even from those in the know. But perhaps this is more theatre than magic.